FedEx leans on cost cuts as DRIVE savings reach $2.2 billion in fiscal 2025

Earnings
โดย Zacks Investment Research·Read original
Summary · why it matters

FedEx is leaning on cost reductions to counter soft shipping demand, with its DRIVE program delivering $2.2 billion in recurring savings in fiscal 2025 on top of $1.8 billion in fiscal 2024. Network transformation efforts including Network 2.0, Tricolor, and European optimization have already exceeded the fiscal 2026 savings target of $1 billion. The company has also cut flight frequencies, parked aircraft, and reduced its workforce, helping it post better-than-expected earnings and revenues in the fourth quarter of fiscal 2026. Rival UPS is pursuing similar measures, eliminating operational positions and closing facilities, while also moving to reduce Amazon shipment volumes by more than 50% by June 2026 under an agreement in principle. FedEx shares have risen in single digits over the past six months and trade at a 12-month forward price-to-sales ratio of 0.77, which is considered cheap relative to industrial peers.

Impact on stocks 3

Industrials± Mixed · 2 stocks
FedEx Corporation
FDX
▲ PositiveCapitalrelevance

FedEx's DRIVE cost cuts delivered $2.2B in savings, beating earnings expectations and supporting shares.

United Parcel Service Inc
UPS
▼ NegativeDemandrelevance

UPS is reducing Amazon shipment volumes by over 50% and closing facilities, indicating soft demand and cost pressures.

Artificial Intelligence▼ · 1 stocks
Amazon.com Inc
AMZN
▼ NegativeDemandrelevance

FedEx's soft shipping demand and UPS's plan to reduce Amazon shipment volumes by over 50% indicate weak demand for Amazon's shipping services.

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